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The story is about Argentine President Javier Milei and his support for a cryptocurrency called “Libra” ($LIBRA) in February 2025, which quickly collapsed and sparked widespread controversy. Here are the details:
Melli’s support for the currency: Late Friday (February 14, 2025), Melli promoted the Libra coin in a post on his X account, claiming that it is a project aimed at supporting the Argentine economy by funding small projects and startups. He claimed that the currency will help attract investment to Argentina.
Market Cap Rise: Following its support, the coin's market cap rose to $4.5 billion, driven by buying from investors who were impressed by the president's comments.
Flash Crash: In just 5 hours, the coin collapsed by 89%, dropping from $4.5 per unit to $0.5, wiping out $4.4 billion of its market value. This crash was caused by massive sell-offs and possible manipulation by the coin’s team.
Doubts about the coin: The legitimacy of the coin has been questioned, as its website was created just hours before its launch, and the domain was registered for only a year, with no clear information about the owners. Posts on X also suggested that the coin’s team manipulated liquidity, leading to a “rug pull” of 20% of their profits, with some insiders making as much as $107 million.
Melli’s reaction: After the crash, Melli deleted his post due to criticism, and announced that the currency was a private project and that he “didn’t know the details,” attempting to evade responsibility. This sparked widespread criticism, with some saying that his support was irresponsible and hurt investors.
Criticism and analysis: Analysts considered the currency a “scam” aimed at draining money from investors. Posts on X saw the incident as a reflection of the dangers of officials supporting unregulated cryptocurrencies, and that its negative impact could spread to other cryptocurrency markets.
Economic context: This incident comes amid an economic crisis in Argentina, with high inflation (143% in October 2023) and a depreciating peso. Mele, known for his pro-cryptocurrencies like Bitcoin, was seeking alternative financial solutions, but this incident has raised questions about the credibility of such initiatives.
Personally I believe this will not be the last official to defraud investors and we will see many more of this in the future. To me they are the cancer of this industry.
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